This year, Sigma, Incorporated generated $636,000 income from its routine business operations. In addition, the...
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Accounting
This year, Sigma, Incorporated generated $636,000 income from its routine business operations. In addition, the corporation sold the following assets, all of which were held for more than 12 months:
Initial Basis
Accumulated Depreciation*
Sale Price
Marketable securities
$ 157,600
$ 0
$ 74,000
Production equipment
115,600
92,480
36,000
Business realty:
Land
235,500
0
241,750
Building
263,000
78,900
218,000
*Through date of sale.
Required:
Compute Sigmas taxable income assuming that it used the straight-line method to calculate depreciation on the building and has no nonrecaptured Section 1231 losses.
Recompute taxable income assuming that Sigma sold the securities for $174,000 rather than $74,000.
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